Facebook revenue up again, another tale from the advertising wars

Written by on December 22, 2016 in Opinion with 0 Comments

S K Chavan / Shutterstock.com

When news comes in that Facebook’s revenues are up – again – it is surely harsh and unfair to do anything except applaud.

When news comes in that Facebook’s revenues are up – again – because they have beaten the ad blockers it is, surely, neither harsh nor unfair not to.

It also poses a serious question.

Why?

If users (not customers, as we have identified) choose not to have their timelines clogged up with crap (surely ‘advertising’, Ed) then why should they be forced to have them clogged up?

Is it arrogance? Is it necessity? Is it that they are maximising short term revenue while quickly thinking about what to do next?

Their advertising model, for small advertisers, is actually very good. But maybe their promises are not promises based in the real world.

Some would no doubt argue that the reason that the internet is free is because it is funded by advertising. It would be difficult to argue against this.

But Facebook started as a social network, and grew into a commercial one.

So surely users should be able to choose. Surely, also, enough of those who choose not to have adverts in the timeline would be prepared to pay to keep up with friends and watch cats sneeze.

We have said before that we simply cannot understand the valuations of companies that survive (and thrive) solely on advertising revenue and now that the advertising wars are heating up even more, with ad blockers being circumvented by techniques that block the ad blockers, surely the moment when Facebook’s users switch off grows closer?

Facebook is already hunting for new audiences and revenue streams, heading into the jungle of hardware and the swamps of net neutrality to get Facebook in front of new users. But is it quickly enough?

Some would argue that 1.8 billion people is a pretty pervasive argument, and, for sure, that is a huge audience.

Remember, though, that Facebook and the like are only 10 years old or so. Remember too, that companies like Kodak were, in their day, huge, indestructible. Remember when the world thought that those mid-sized computers that Digital Equipment (who?) used to make would rule the business world?

Nothing in this world is certain, and less so in the digital world. And when Facebook’s users are now seen as old, as they are, it won’t take much to see vast numbers switch to something else.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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